Soaring rents force lifestyle changes

Matthew Holmes and Jessica Dickinson Goodman opted to spend more for a smaller apartment partly because they like the Capitol Hill neighborhood. But the young couple now work on opposite coasts and haven’t decided where they’ll settle down.

Mark Harrison / The Seattle Times

Apartment rents will average $2,200 in The Nolo, opening in September as part of the Stadium Place project under way north of CenturyLink Field.

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Developers know the idea of shuffling furniture and heavy boxes into a new apartment is especially unappealing around the holidays, Seattle’s rainiest time of year.

That’s why they were so surprised to see what happened last winter with The Lyric, a 234-unit building on Capitol Hill. Within four months of its November opening, the complex near Broadway and East Thomas Street was completely leased out to renters paying a startling average rent of $2,200 a month.

“You’re always going to see that pop at the beginning of the leasing period because it’s new, it’s exciting,” said Billy Pettit, senior vice president of Pillar Properties. “But then we expected a moderate leasing period. What we got was moderate times infinity.”

Even after hundreds of other units opened up in Seattle this year, demand and rent prices have continued to move up and show no signs of settling down soon.

For renters and homeowners, market forces are permanently altering the familiar face of many neighborhoods. While wealthy newcomers are helping to revitalize neighborhood business districts, the reality is that many renters, saddled by stagnant wages, are being forced to reexamine lifestyle choices and, in some cases, move out of Seattle altogether.

Low housing inventory, a growing population of young tech-company workers and changing attitudes about when to buy a home are all contributing to rent increases throughout the Seattle metro area.

“It’s almost a perfect storm, and we haven’t seen any change in weather on the horizon,” said Pettit, whose company will open its latest building, The Nolo, next month in Pioneer Square. Its average monthly rent? Also $2,200.

Widespread increases are evident in rent statistics from Zillow, an online real-estate database: In the last two years, the median rent for Seattle studio apartments has gone up $434 in Wallingford, $419 in Capitol Hill, and $306 in Ballard.

Outside of Seattle, median studio rent increased over a two-year period by $423 in Bellevue, $361 in Federal Way, and $295 in Everett.

Recent rent increases can be blind-siding. With 60 days’ notice, Seattle landlords can legally increase rents as much as they want. Renters have flooded the Tenants Union of Washington State hotline in the last year, shocked at getting monthly rent increases of $300 and more.

What’s fueling rent increases most is development itself, said Jonathan Grant, the Tenant Union’s executive director. If almost all new units cater to wealthier tenants, he said, increasing supply is no path to getting rents to go down or even level off.

“The reality is that these units are high-cost, and often these were taken out of affordable-housing stock,” Grant said. “That’s why you see this theory of supply and demand being turned on its head.”

Earlier this summer, The Seattle Times asked readers how they were coping with rising rents, and dozens responded.

Some told us they’re reconsidering whether they’ll ever be able to save enough money to buy a house if they want to stay in the Seattle area. Many told us they were looking to downsize and move to smaller units — in some cases, really small units. Others said they are being forced into long, daily commutes between work in the city and more affordable housing in the suburbs.

Almost all of them feared that by the time rent prices level off again, life in the Seattle metro area could look very different.

Scrapping saving habits and scraping by

Recent University of Washington grad Ornella Bardinelli is paying more than half her income to stay in a Fremont apartment. She said she’s researched apartments in communities immediately outside the city, but finds those units are barely more affordable once she adds in the cost of commuting to work in Seattle.

The 23-year-old supplements her entry-level event-planning job, which pays about $25,000 a year, with a part-time job and any other work she can find.

“If I can make extra money somewhere, I’m there,” Bardinelli said. “I’ll do anything short of stripping at this point.”

Even older renters with higher salaries are seeing their savings squashed by the rental crunch. Homebuying may never be in the future for some who stay in the Seattle area because they’ll never be able to save enough for it.

That reality is dawning on Kim Baker, 38, of Green Lake.

Baker’s rent for a 700-square-foot, two-bedroom unit she shares with her fiancé went up $100 last fall, then up another $185 this summer. Her landlord also suddenly shifted the cost of utilities to tenants with a flat $75 monthly bill.

Add it all up and, in less than a year, the monthly cost of living at Baker’s apartment has gone up $360 to $1,445 per month.

It’s completely shaken up the couple’s short- and long-term budget plans, which also have included paying off car and student loans. She says they are moving out soon to a smaller, more affordable place to rent, most likely outside of Seattle.

“For now, renting gives us the flexibility we need. But at the same time, it is sapping our resources,” said Baker. “I feel like I might be renting here for the rest of my life.”

Small spaces in dense neighborhoods

Smaller, more expensive units have become commonplace in the densest neighborhoods. The average monthly rent for all unit types on Capitol Hill — $1,395, according to an industry-analysis firm, Apartment Insights — buys about 500 square feet in some buildings.

Those who need a cheaper place to stay in the city can look for in-law units, converted garages or shared housing situations that can be found on websites such as Craigslist. But even those can be expensive: One reader who responded to our online questionnaire said she was renting a converted garage of less than 400 square feet in Phinney for $1,000 a month.

Many have been bypassing those options for microhousing units, often called aPodments. Rent is around $600 for those quickly multiplying units, which come as small as 150 square feet.

Several Seattle neighborhoods have railed against the proliferation of aPodment developments, saying that, on top of using legal loopholes to bypass design-review laws and public-comment periods, they attract transient tenants who aren’t invested in their community’s long-term quality of life.

Andy Christnacht, who lives in a small, basement unit of the Alturra aPodments in Capitol Hill, thinks those complaints are overblown. The 21-year-old transfer student from Tacoma moved into his unit because he was accepted at the UW too late to find an affordable place to live near campus.

“Yeah, a lot of them are between jobs, maybe between wives. Others work at cupcake shops here,” said Christnacht. “One even left some extra cupcakes on the step here for us.”

For a floormate of Christnacht’s who has an entry-level job at Amazon, living in an aPodment near work has been a good choice professionally and financially. At this point, he said, he’s more interested in getting ahead at work than hosting a party for friends at home.

“It would be nice to get my student loans out of the way as soon as possible so I can start my life sooner than later,” said Christnacht’s neighbor, who didn’t want his name to be published. Within the next year, he’s hoping for a big enough raise to move out of Alturra.

Suburbs not much cheaper

Even a move out to South King County, the Eastside, Kitsap or Snohomish County isn’t quite the escape from high costs of living that it used to be.

Since last summer, Zillow reports that rents have climbed 7.5 percent in Kirkland to a median of $1,958 per month, 5.8 percent in Lynnwood to a median of $1,607, and 4.7 percent in Everett to a median of $1,431.

The lease on Stephanie Scott’s one-bedroom apartment in Kent isn’t up until January, but the 41-year-old says she’s anticipating a rent increase of more than $100 when it ends, to more than $1,000 a month. She says almost all of her neighbors with leases that ended this year have left the complex because of rising rent. The management confirmed to her that she could anticipate an increase, but she hasn’t been told how big it will be.

“I don’t know where they moved to, but they’re all gone,” Scott said of her former neighbors.

Then there’s the cost and inconvenience of commuting: If you take public transit, the chances that a route runs near your home are lower when you live in the suburbs. And, as King County Metro considers service cuts, those chances aren’t improving. With any luck, transit fares won’t continue to climb as much as they did between 2008 and 2011 — 80 percent.

The King County Metro commuter calculator (http://1.usa.gov/3uEa1X) estimates that the minimum monthly cost of one person commuting to Seattle from Woodinville would be $239, $287 from Federal Way, and $334 from Everett.

To cut down on the frustrations and $240-300 cost of driving alone, Scott started a King County Metro van pool for an early commute between Kent and Seattle’s Greater Duwamish area. Her employer, the U.S. Army Corps of Engineers, completely subsidizes it.

She says the idea of sticking around in an unstable rental market exhausts her, so she wants the next lease in Kent to be her last. She’s planning on buying a house, even if she can only afford one out in Pierce County.

“I don’t want to move and incur expenses on another deposit,” Scott said. “It might be a longer commute, but I guess it just depends on where I can find a place.”